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(Please also see Homework 6 Excel Examples for computation on Excel) Q6: Returns and Standard Deviations: Consider the following information: State of Economy Boom Rate

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(Please also see Homework 6 Excel Examples for computation on Excel) Q6: Returns and Standard Deviations: Consider the following information: State of Economy Boom Rate of Return It State Occurs Probability of State of Economy Stock A Stock B Stock C .35 .40 .27 .10 Good .50 .16 .15 .08 Poor .25 -.02 -.03 -.04 Bust .15 -.12 - 18 -10 c. Your portfolio is invested 30 percent each inwand C, and 40 percent in B. What is the expected return of the portfolio? d. What is the variance of this portfolio? The standard deviation? (Please follow above example to solve this question)

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